Gloria Ferris

one woman’s view from a place by the zoo in the city

Archive for the ‘finance’ Category

What Do Fishing, Blogging, and Relationships have in Common?

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When I stumbled on Robert Pearce’s recent blog post that referenced Capital Financial Group, it was hard for me to recognize the men and women that I have come to know over the years. Mr. Pearce’s broad stroke of the pen does the financial services and his profession a disservice.

In striving for his intent to raise fear, uncertainty and doubt in his readers, he has done a disservice not only to an independent producers’ brokerage but also to the dedicated men and women who have forged a relationship that works for them as well as their clients.

You see, I have met many of the people he supposedly describes in his article. You do not know me, just as many of you do not know Mr. Pearce, but I ask you to trust my statement that I didn’t meet people like the ones he describes.

Over the years, I have met a dedicated group of people who strive for professional knowledge by learning how to ask hard questions of people who are supposed to have the answers, all the time knowing that there are no crystal balls. I have participated in group discussions led by their peers. They do not take their obligation to themselves and their clients lightly.

I have interacted socially with their wives and husbands. There are those to  whom I nod in a crowded room and there are others that I can’t wait to see again. When you interact with a group of people in a professional setting, and then later, break bread with them socially, you get a feeling about who those people are, what you have in common, and how you relate to each other.

I have come to know this company, their registered reps through themselves and their spouses and I don’t recognize the people Mr. Pearce describes. In any profession there are those who are better at what they do than others, there are the technical and analytical ones, there are the ones who are listeners, and the ones who map out a plan and help you stick to it; very seldom, are they like Mr. Pearce’s description. If yours is, by all means, consult someone who can help you, but do not succumb to fear, uncertainty and doubt.

Trust is a key in any relationship and whether you are choosing a financial advisor, an attorney, a friend, or a spouse, it should be at the top of your list of criteria. Through the years, you choose trusted advisors to guide you on your way. Chances are your trust is not misplaced.

I am a blogger. I read blogs. I post things to the internet. Would I choose a trusted advisor from what I read on the internet? No. Would I want someone to choose me as a trusted advisor based on what they found on the internet? No. Some things are still better done face to face. Trust is still a key component of good relationships whether they are professional or personal.

My father was one of my trusted advisors. Now, his sage advice only remains in my memory. He was an avid fisherman, preparing for each trip with anticipation. Sometimes, he would come home with a bucket filled with fish; other times there would not be many at all. I couldn’t understand his fascination with a sport that could yield so much or so little.

He said, “Cat, ask yourself this question: Would you rather catch a fish like Ernest Hemingway’s Nick Adams in a swift river, or a pond stocked with hungry fish fighting for food?

I know my answer. What’s yours?

Oh. Here is Robert Wayne Pearce’s posting from this past June:

By Robert W. Pearce of Law Offices of Robert Wayne Pearce, P.A. posted in Capital Financial Group on Saturday, June 1, 2013.

Capital Financial Group Inc./H. Beck, Inc. (Capital Financial) is an independent broker-dealer headquartered in Bethesda, Maryland and reportedly has over 1000 registered representatives across the United States operating in one or two person offices. Its branch offices are largely comprised of small producers earning commissions at higher pay out rates than the major full-service brokerage firms, a recipe for disaster when it comes to protecting investors from churning and unsuitable investments and unsuitable investment strategies!

Churning is a violation of Federal and state securities statutes, industry rules and regulations and a breach of fiduciary duty to investors under common law. Churning can occur if a Capital Financial broker exercises control over the investment decisions in your account and purchases stocks or recommends that you purchase and sell stocks for his benefit, i.e., commissions not yours! These trades rarely, if ever, make the investor any money. In fact, the additional commissions raise the break-even point for the investor to the level where the stock must perform at an extremely high level in order for the investor to make any money.

In every broker-investor relationship, the broker must assess what the investor’s goals are as well as his or her risk tolerance. This assessment is based on a number of key factors, including the investor’s stated objectives, risk tolerance, financial condition and tax status. It is the broker’s responsibility to only pursue investments suitable for that investor based on these factors. A stockbroker is obligated to only recommend suitable investments and investment strategies. If a Capital Financial broker recommends unsuitable investments and unsuitable investment strategies, it can leave you vulnerable to unnecessary risk and losses.

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.

There is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to excessive purchases and sales of securities and securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. Generally, no manager is onsite to detect the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. There is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, there may be only one compliance audit visit per year at many of these offices. These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms.

Have you suffered losses in your Capital Financial brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Capital Financial stockbrokers who engaged in churning, recommended unsuitable investments and unsuitable investment strategies that caused investors losses.

The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website,, post a comment, call (800) 732-2889 FREE, or email Mr. Pearce at for answers to any of your questions about this blog post and/or any related matter.

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Capital Financial Investor Alert – Watch Out For Churning and Unsuitable Investments! | US and International Securities, Commodities and Investment Dispute Law Firm | Law Offices of Robert Wayne Pearce, Boca Raton FL

Written by Gloria Ferris

January 31st, 2014 at 1:51 pm

My letter to Councilman Cummins and others about the “State of the Art” Scoreboard

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Dear Councilman/Councilwoman –

The Cleveland Browns needs to share revenue with the City of Cleveland  to the extent that football is supported by the public purse.

I do not favor giving the Browns any more money for the stadium unless we the people become full and mutual partners in the revenue–not necessarily, just in the profits.

What the public has invested now needs to be calculated honestly, and what the owners have invested now needs to be stated transparently and completely. From that point on, further capital contributions can be tracked, and concessions and incentives can be tallied. Revenues should then be divided. Profits come after that.

Let them move the team if businesslike terms aren’t palatable. This extortion must end. Living with a lease negotiated while Mayor Jackson was President of Council, surely, does not mean we should continue to give and give more than necessary.

As one of our elected officials meant to counterbalance the City Administration, please do your due diligence and remember those who believe in your ability to stand up to bullies.

Also, I believe support of the team should be regional, not merely shouldered solely by the City of Cleveland.



Gloria Ferris

Written by Gloria Ferris

November 25th, 2013 at 5:28 pm

Freakonomics » Should We All Just Give Cash Directly to the Poor?

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Soon, we’ll hear the cry of the secular nonprofits, in one voice, shrieking, “What about us?”

To paraphrase Niehaus, is it fair to say, “A typical poor person is poor not because he is irresponsible, but because he was born in a ghetto in Cleveland”?

Perhaps it would be better to give directly. Certainly, it should be better than funneling funds through the city government, the city council, and the local councilperson.

Silicon Valley heavyweights like Facebook co-founder Chris Hughes and Google have a new favorite charity: GiveDirectly, an organization that makes direct transfers (via M-Pesa) to poor people in the developing world. From Forbes:

“Instead of building hospitals, why don’t we just give poor people money? Research shows it’s effective,” [Hughes] said. Hughes, who purchased The New Republic magazine in early 2012 and serves as publisher, also joined the board of GiveDirectly.

Backing up Hughes’s point was Jacquelline Fuller, Director of Giving at Google. She told the crowd Thursday night that one of her superiors at Google was extremely skeptical when Fuller first suggested that Google back GiveDirectly. “I was told, ‘You must be smoking crack,’ ” Fuller recalled. But GiveDirectly had exactly what Google wanted: lots of data on how the recipients of cash used it to improve their nutrition, their health and their children’s education. After looking at the data, Google donated $2.5 million to GiveDirectly.

GiveDirectly stems from economist Paul Niehaus‘s research in India, where to limit corruption the government  makes direct cash transfers via mobile phones.  “A typical poor person is poor not because he is irresponsible, but because he was born in Africa,” says Niehaus, adding that GiveDirectly’s transfers have had positive impacts on nutrition, education, land, and livestock — and haven’t increased alcohol consumption.  The charity is also No. 2 on Givewell’s list of recommended charities.

Freakonomics » Should We All Just Give Cash Directly to the Poor?

Written by Gloria Ferris

June 4th, 2013 at 10:24 am

Alan Mooney—A Good Man Done Wrong

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Here is my comment on the Crain’s Investment News article which addresses the suit my friend Alan Mooney has filed with FINRA against FSC.

I know Alan Mooney personally, and feel that there is a need for some amplification of the situation surrounding him. Alan wrote the contract he used with FSC and did not sign or use FSC contracts. Alan wrote The Money Foundation contract which governs the down line reps who have Alan Mooney as their OSJ. Alan’s contract had language far beyond anything in the industry outlining ownership in regards to client information and intellectual property rights of reps. Alan also had a special contract as a Super OSJ meant to protect him from FSC recruiting his down line. A provision in the contract included a one year separation clause before FSC could recruit or retain any of Alan’s down lines. These unique 1997 contracts had been announced in national phone calls with over 600 reps listening when Jim Wisner signed the contract. 20,000 reps have learned about the signing of the contracts through seminar mailings and talks by Alan. Thousands of reps all over the United States who have attended Alan’s seminars have heard Alan talk about true independence.

That contract was honored by FSC for over 11 years until Mark Schlafly arrived on the scene, and for sure, Joby Gruber, Jim Wisner & John Bell Keeble would flip over how rotten things are at FSC today! FSC not only solicited Alan’s down lines but offered big bucks to top producers in Alan’s group to sell Alan out. In fact, in a phone call September 3, 2009, Mr. Schlafly promised Alan this would not happen anymore. Within 5 minutes of Mr. Schlafly’s disconnecting with Alan, he called Alan’s biggest producing rep. He not only solicited the rep but offered to backdate the money offer by 7 months.

There were hundreds of OSJ managers present when Alan offered to buy FSC in October 2008. Over a hundred OSJ’s had given Alan a Letter of Intent (LOI) to help buy out FSC. Within days after that meeting in Atlanta lots of rep’s with FSC were threatened by an AIG New York attorney to stop or else. The threats were in writing. Mr. Schlafly then had a national phone call with all FSC reps and threatened reps could not leave FSC because FSC owned their client information. Alan then posted on an FSC MFA ONLY blog a copy of AIG attorney Noah Sorkin’s letter to the SEC stating that at AIG the reps own that information. This exposed Mr. Schlafly and outted him as either dishonest or incompetent, and no matter what is correct, he was wrong in his threats.

Only Alan Mooney had the courage to stand and tell the truth on these issues–the guts to try and defend all the reps at FSC. There was no financial advantage for him. He could have stayed silent and shared the information only with his down line think tank- the Money Foundation. Most of the people following Alan are deeply moral and very spiritual people (many are Ordained Ministers). Some people jokingly have called us his apostles. We the so- called apostles of doing what is right, being independent and part of his think-tank, know the truth and know Alan tells it like it is! We know Alan as a Christian man of deep faith who has written books on Ethics for Success for stock brokers; a man knighted Sir Alan Mooney by order of the Pope for his work with inner city kids and street people.

The following week after Mr. Schlafly’s call, Schlafly clumsily had to retract saying “he didn’t know about the AIG attorney’s letter to the SEC”, but he still threatened “the use of negative response letters and months of holding reps up if they try to move”.

Alan is a holy man who stood up alone for the independent reps at FSC and those he stood up for should show their support for him now. Unfortunately, not all people are warriors, but those of us who value independence and ethical behavior know that now is the time to stand with this man. He personally paid for and brought his attorney to that meeting in the fall of 2008 for the benefit of all the other OSJ’s in what he believed was the beginning of how together they could help FSC remain a beacon for independent reps in the financial world.

Further, the person calling only OSJ’s (not their downlines) at FSC is an attorney’s son and is conducting a survey, and nothing more. Those who claim otherwise are not being truthful. People who are threatened by truly moral leaders always try to defame them. Alan is a man who freely shares knowledge, expertise, and best practices to make the financial world a better place. Simply, Alan is a good man done very wrong.

Independent Reps everywhere should take heed of this lawsuit because who owns the relationship with your clients, who owns your intellectual property, who has duties to whom, and who calls the shots in your business, in your professional practice—it is all at stake.

Read the full article here.

Written by Gloria Ferris

November 7th, 2009 at 3:59 pm